Devaluation of the Jamaican dollars has resumed, the PNP is back !!

What we all feared with the return of the PNP to power has started to manifest itself. The J$, which has been losing value with respect to the  US$ has closed at the lowest value it has traded in at least two years. Today it takes an average of  J$88 to purchase  US$1.00 and has truly signaled the return of the PNP to power.

Under past PNP administration, the government had embarked on a devaluation policy, which  only served to increase the cost of goods and service to Jamaicans and made the life of Jamaicans so much harder.

Given this recent devaluation , which is expected to continue and the recent imposition of GCT on a number of previously exempted items along with  the increase in the GCT on electricity, it will no doubt result in significantly levels of upwards prices adjustments for  Jamaican consumer in particular the poor. It appears as if  everything ” tun up for real”.

The former PNP administration sought to use a high interest rate policy to defend the value of the Jamaican dollar, which moved our interest rate to dizzy heights. Can we say this is Deja Vue?  Are we returning to where the PNP left off in 2007, when they were booted from office.

No doubt this will all lead to higher levels of inflation, which will lead to higher prices , which leads to higher wage  demand, which leads to more inflation and the deadly cycle repeats itself.

I am now more than ever convinced that the PNP government does not know how  to function in an market driven economy and their constant bungling has only served to make Jamaica the biggest pan handler in the entire Caribbean.

Can we truly say, this is what we voted for, is this really better than what existed before?

Historical exchange rates 1971 – May 2012.

Exchange rate 2007 to May 2012.

St Kitts to manufacture solar panels !

Why is it that other Caribbean countries are able think ahead and we get caught up taxing everything we can,   borrow all we can and continue to focus on politics above country.

Here,  St Kitts is working with their Taiwanese partners to not only add manufacturing jobs and these jobs will serve to reduce St Kitts overall electricity cost to its customers, reduce its oil bill and keep that country on path to be the Caribbean first green country.

This is what governments are supposed to do.

http://www.sknvibes.com/news/newsdetails.cfm/58569

Complant tax break, is it fair?

We note with amazement the 20 yr tax break given to Complant by the former JLP administration in relation to the divestment of the sugar factories. Apart from the jobs that were saved, how does the country benefit from what is considered to be a rather very generous break on corporate tax, transfer tax, stamp duties, gct and custom duties.

The hotel sector, which has significantly higher levels of investments gets 10 yr , renewable at the end of this ten yr period, once the hotel owners decide to do significant levels of refurbishing  before expiration of this first ten years.

Audley Shaw and the then JLP erred in giving Complant this 20 yr tax break, they should have received no more than 10yrs. It beats me why our politicians continue to sell the country’s assets, without ensuring that the country gets value for money . I have no problem in selling non performing assets, but we must make sure that we move to get the best deal possible for Jamaica and Jamaicans, is that too much to ask.

I guess it is, because we continue to do the same thing over and over again.

Britain refuses to support China Harbour unsolicited proposal in Cayman.

Since we are no longer subjected to British rule, we really don’t have to follow their guidelines do we.  Here is the latest release from the OCG Jamaica on this development in the Cayman Islands.

media-notification-1

NO IMF DEAL BEFORE NOVEMBER

The PNP during the election campaign gave the commitment that a new and better IMF deal would have been completed in mere weeks after they were elected.

Its now almost 6 months after the elections and as far as I know, we are no closer to a deal than we were 6months ago. The then opposition leader said we would be kept abreast of the negotiations, unlike what the JLP did, which was to keep us in the dark.

The new administration lied and has pretty much don exactly what the JLP did in the last two years of the now defunct IMF deal. They have failed to negotiate a new deal and they have failed to explain to us, why that has been the case.

From the information that I have come across, it appears that the very issues that affected the JLP during the final phase of the IMF deal are now the very same issues preventing us from securing a new deal.

Now we are being told by Dr Phillips that we may not get a new deal until the NOVEMBER !!

This is unbelievable and has served only to widen the trust deficit between this new PNP administration and the people. The mendacity of the PNP in government is showing and Jamaicans will be left once again to pick up the pieces as the country continues to lose credibility.

Which international lending agency would lend money to a set of persons, who hounded and damaged the country’s reputation international in order to gain political power.

Which international lending agency would be lining up to lend money to a set of persons who blatantly lied to the populace in order to get state power, knowing fully well that most of what they promised could not have been fulfilled.

Look out for a return to high interest rates as these lending agencies cannot trust the government due to a lack of credibility and as such will hike interest rate, when it finally decides to lend us money provided we can secure an IMF deal.

I would also like to know if it is true that given that no deal is sight just now , the government will be forced to go into the local market for loan, which will serve to push up interest rate once again.

Can someone please tell me that this in not true.

http://jamaica-gleaner.com/gleaner/20120530/business/business1.html

2012-2013 Revenue Measures as proposed by the Finance Minister

Here is the full  document as presented by the Finance Minister  last week.

2012-2013- Revenue Measures

Is the PNP about to wreck the Jamaican economy ( again)?

The PNP unleashed the largest tax package in the history of Jamaica and seems set to choke the life out of the economy as well as that of the poor, which it has always said it will  protect.

Grace Kennedy today reported that poor Jamaicans will no longer be able to buy ” bully beef” ( canned beef) and chicken price is set to go up by virtue of the 66.5% increase on GCT on electricity.  Rain forest has also announced that all fresh food, vegetables and fish are set to go up due to the GCT being applied to these items and well as the increase in GCT on electricity , which his company cannot absorb.

Yam, Dasheen, plantain, banana etc , will all now attract GCT, but only if you buy these in the supermarket. If the ground provisions and fresh food and purchased in the market, then there will be no GCT being applied to these items, due to the fact that these vendors are not registered to collect GCT.

Jamaica’s star performer , the tourism sector is about to become  less competitive  when compared to many other destinations in the region by virtue of this new room tax, which was levied on the only sector in the country that is growing and contributing in real terms to the Jamaican economy. The PNP has sought once again to transfer wealth from the poor to the rich, much like PJ Patterson did, by virtue of the 25% reduction in corporate taxes.

The PNP has really been true to form when they said during the election  that they were going to ” tun up d ting”. I really don’t believe that Jamaicans expected that the ” ting wud tun up so much, till e almost buck”.

Courtesy of the Jamaica Gleaner.

Where is he running to, come like im neva hear what KD Knight said, ” There is no place to run, given that they just gave the JLP the boot, twice”.

 

Ok Mama P will rescue you come next week Tuesday, where its expected, that she will announce a few roll back in some tax measures.

Don’t cry about the new tax package my dear, Mama P loves you and I will have some goodies for you next week Tuesday.

 

PNP’s Credibility Slipping Fast

Now that headline, would appear like the typical headline written by Jay, since many believe I have a inherent dislike for the PNP, but sorry to disappoint you, it was taken straight from the Gleaner. The quote, which greeted me first was the one below:

“The traditional ways of balancing the books have been through increasing taxes and reducing expenditure. But in times of economic challenge, such as the country currently faces, this approach is disastrous.”

 Portia Simpson Miller, budget debate April 15, 2010

http://jamaica-gleaner.com/gleaner/20120528/lead/lead8.html

My commentary is below.

Did PSM as opposition leader really said that just two years , well  since we know that she did, how does she reconcile that statement  with what her government just did in the recent budget presentation.

For me, since the departure of Michael Manley, the PNP has always demonstrated that as a party it has very little credibilty, but one may ask the question” If the party has so little credibility in your eyes Jay, why do they keep winning elections, while the JLP cannot”.

The answer to that question is not very diffcult to answer and many will take offence to what I am about to write, but guess what the facts speak for itself.

On the Transparency International Corrpution Index, Jamaica is ranked very low and has been slipping further over the years. The low ranking as many of you know, means Jamaica is considered to be a very corrupt country and its public officials are considered equally corrupt, afterall the people is the country.

Given that piece of fact, the credibility of the leaders of such a country is questionable and so is the credibility of a large proportion of the population.

Its a fact also, that the people of a country will for the most part select a party and  by extension,party personnel , who best reflects the philosophy and general views of the people its seeking to represent. So if the people of the country have very little credibility and the people will go for those who share their views, its easy to see that those folks will elect/select persons who also have very little credibility.

So there is the answer to the secret to PNP winning ways, this party best reflects the thinking of the people of the country and as such will continue to win elections until the people mental state has changed.

It may sound harsh , but its full time we face up to the fact that ”  We will be, what we have always been, until  individually and collectively, we decide to make a change”

eg We will continue to be poor until the day we decide, we will no longer be poor. Having then made that decision, we can choose two paths to gain wealth (1) the corrupt way or (2) by earning it.

Now depending on our choices, lets say someone selected one ( the corrupt way), then the same applies and we will continue to be corrupt in our behaviour until we decide that we no longer want to be corrupt, its at that point that change will begin and will continue if we remain committed to work on making that transition.

I leave you with two quotes from one of the world’s most brilliant minds, Albert Einstien.

1. “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”
2. ” If you cannot explain it simply, you don’t understand it well enough”

Jamaica’s monstrous debt !

I would like to share this, with those who choose to read and not be brained washed by our brain dead politicians. I cannot remember where I got the article from, but I did not write it and credit is due to the author. ( Forgive me for not having the name).

Regardless its a very good article, which looks at Jamaica’s debt situation and how it evolved, while exploring some options, which have been banded about to reduce this burden.

Take a close look the comparative analysis between Jamaica’s debt situation and Japan. The author notes that Japan debt to GDP ration stands at 220%, but debt repaying represents only 2% of the budget of that country. Contrast that with Jamaica , where 57% of the budget goes towards debt repayment in this years budget.

Note also that this recent budget was crafted towards the IMF and international creditors for one reason only and that is to get more DEBT, can you believe that. So by the time the next budget comes around and providing nothing esle changes, we are looking at over 60% of the budget going towards debt repayment.

Default is no longer just a possibility, in my opinion is eminent !

( This portion in italic are my opinion and not that of the writer of the article)

Jamaica’s Debt

Read the article on the link below.

GCT increase of 66.5% will hurt the poor badly!

Apart from feeling deceived by the Portia Simpson-Miller lead administration, small business owners and poor Jamaicans must be ruing the fact that electing the PNP has just made their lives harder and burden heavier vs being lighter. Having ran away from the bitter medicine promised by the JLP the people ran to the PNP, who instead of telling them they would have gotten medicine this bitter, simply just “jook” us all whether we liked it or not.  ( jook means to prick)

The decision to move the GCT up on  electricity has just made life that much harder for the poor, who,  though not  impacted directly  will be impacted indirectly by this surprising  move by a party, which has championed protection of the poor.

Small business who have already been complaining about the high cost of electricity, just had the GCT component of their bill move up by 66.5% and in many case cannot reclaim this added cost from the government. This therefore means that Mrs Matty shop , which caters for the poor in many communities and whose gross income is less that $3m, will have to increase the price of her goods, to recover the increased GCT cost. The people buying from these shops are not middle income, but mainly poor people.

How many Jamaicans are aware that in areas like Payne Land, Cockburn Gardens and Majestic Gardens people are buying bread not whole of even half, but by the slice, yes I said by the SLICE!  The last time I visited one of these areas a slice of bread was around $20.00

Condensed milk is sold is small plastic bags tied at the top having been poured from a tin, as many of these person cannot by by the tin. When last anyone on this blog has heard about “big gill” of cooking oil. For those who read from overseas, “big gill” is equivalent to 1/4 of a pint of liquid and you only  can get these in the rural areas of very poor urban  areas.

While many said Audley was a tree card man, what Peter and the PNP did was the biggest three card trick I have seen for a long time and guess who will bear the brunt of this, yes the very poor who were under the illusion that the PNP was their saviour. I guess the saying is correct ” The people get the government they deserve”.

Its just a pity that all of us has to suffer for the irrational behaviour and bad decisions of so many of our people., who continues to fail to make decisions based facts and data but are quick to run along with what I term promises and ” duppy stories”.

Consider the recent tax books , you think that was not carefully thought out, hell no you are wrong.  You do just that so “they” read less and continue to wooed by the  anancy stories being told by our politicians, what a brilliant strategy.